The Australian Bankers' Association said the levy would hurt depositors.

"The banking industry wants to see the federal government reconsider this decision as a priority and would like to see the coalition rule out the fund should it win government," chief executive Steven Münchenberg said.

Customer Owned Banking Association, which represents credit unions and building societies, said small lenders like themselves should be exempt.

"Focusing the levy on the major banks means the levy is a prudent risk-management tool rather than a tax on depositors," spokesman Mark Degotardi said.

Think tank The Institute of Public Affairs said it would punish savers.

"Contrary to government rhetoric, the tax is not an insurance premium paid by bailed out bankers, but a cynical revenue grab from savers," senior fellow Julie Novak said.

However, the Institute of Chartered Accountants Australia supports it as an economic security measure.

"But if this is motivated by a need to balance the books in 2016, then that's a different story," institute chief Lee White said.

Mr Bowen said Australia's big four banks - Westpac, Commonwealth, ANZ and National Australia - had collectively made $94 billion in profits over the past four years.